Scottish Borders Council plug health spending gap with £2.5m

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Scottish Borders Council has had to provide £2.5m of extra money to its soon-to-be terminated care company, to cover high demand and a failure to make required savings.

At a meeting of the council’s executive board on Tuesday November 19, councillors from the Conservative/independent ruling group rubber stamped plans to move £2.5m to cover “significant underlying pressures” in the health and social care budget.

The money will come from underspends in other services, a transfer of money from the Scottish Borders integrated joint health board, and the settlement of an industrial dispute with an IT company.

Scottish Borders Council’s health and social care services are provided by the council’s wholly-owned care company SB Cares.

However, in September the council voted to terminate its beleaguered care company and once again provide care services in-house, following several critical care inspections, poor financial returns and the suspension of four managerial staff.

When SB Cares was founded in 2015, councillors were told the company could generate profits of £1.6m over the first four years, but recent reports show the organisation has reported losses of £7.5m.

The services SB Cares provided will continue, but will be overseen directly by council officers.

A report to councillors, authored by the council’s financial services manager Suzy Douglas, reads: “The pressures in health and social care arise through the non-delivery of savings, reduced income from charging and the costs of additional care packages.

“The financial implications of both increases in service delivery within health and social care, and reductions in income, will need to be addressed as part of the 2020/21 financial planning process to ensure the budget is as robust as possible.

“Performance against the delivery of approved savings within the integrated budget is not currently acceptable and the permanent delivery of savings remains a key requirement to ensure the council lives within its means and operates a stable, balanced budget.”

In a press release, Tweeddale East councillor Robin Tatler, who acts as the executive member for finance, said: “Since the last report to the committee in August a significant financial challenge of £2.5m has arisen, largely due to more people requiring more complex care than was predicted when the budget was set last February.

“Through underspends in some services and income from other areas we will be able to minimise the impact on the overall revenue budget and remain confident of achieving a balanced position come the end of March.

“However, this does emphasise just how challenging it has become for the council, like other local authorities, to continue to balance our books when demand for services continues to grow.

“In the Borders there are particular demographic pressures which will only increase year-on-year too.”

A spokesperson for Scottish Borders Council said: “SB Cares delivered a valuable contribution of £3.6m of net savings back to the council over four years.

“The losses calculation takes into consideration pension fund liabilities which the council would have had to pay in any event.

“The pension fund is 114 percent funded, so there is more than enough to pay for pension benefits when they are due and therefore there is absolutely no impact on the council’s budget or reserves.”